Mar 4, 2017

China’s
National People’s Congress gets underway this weekend, and investors will get
an update on the health of the US labour market.

Here’s what to watch in the coming days.

China

Li
Keqiang, China’s premier, delivers the country’s proposed economic targets on
Sunday at the opening of the fifth session of the 12th National People’s
Congress, the country’s top legislature.

While
much of the discussion takes place in closed-door meetings, economists are
paying attention to the Government Work Report and the 2017 growth target. Jian
Chang, economist at Barclays, said their base case is for 6.5 per cent growth.
He also expects the government to maintain the budget deficit at 3 per cent and
inflation target at 3 per cent.

On the
politics front, China-watchers will keep their eyes peeled for clues on who
could make it to China’s 25-member Politburo and possibly the Politburo Standing
Committee (PSC), following a reshuffle of some senior provincial and central
government leaders, particularly with the 19th Party Congress scheduled for
this fall.

UK budget

UK
chancellor Philip Hammond will present his first budget on Wednesday, and economists
expect it to show a decline in gilt issuance.

“The UK
economy has outperformed earlier forecasts, and so there should be a bit more
revenue to play with, leading to the first decline in borrowing in 3 years,”
strategists at TD Securities said. “But we see a cautious budget with few
giveaways as the UK approaches Brexit.”

European Central Bank

Even as
investors prepare for the US central bank to tighten monetary policy, the ECB
is expected to leave rates unchanged when it meets on Thursday.

“The focus
instead is likely to be on possible changes in language, with a number of
voices since the last meeting calling for a change to the ECB’s forward
guidance,” said economists at RBC Capital Markets. “An updated set of staff
macroeconomic projections, which are likely to see an upward revision to
inflation estimates in particular, will add weight to those calls.”

US jobs

The key
US event comes at the end of the week as investors look to see whether Friday’s
US jobs report will cement the Fed’s case for raising rates, on the heels of
hawkish remarks from chair Janet Yellen and a handful of other Fed officials,
alongside a string of upbeat economic data.

The
report, which comes during the central bank’s communications blackout period,
is expected to show the US economy added 190,000 jobs last month, compared with
the 227,000 jobs added in January. They also expect the unemployment rate to
slip to 4.7 per cent, from 4.8 per cent previously.

But even
if payrolls turn up light, Tom Porcelli, economist at RBC Capital Markets,
argues that “wages will be the lynchpin to whether the Fed ‘likes’ this report
enough to vindicate hiking in March”. Economists expect that wages will have
improved.

Average
hourly earnings are projected to rise 0.3 per cent in February from the
previous month, when they climbed 0.1 per cent. That would leave earnings up
2.8 per cent from a year ago, compared with 2.5 per cent in January. And an
uptick in wage inflation would certainly help strengthen the case for a March
move, as the Fed’s preferred inflation measure is near the central bank’s 2 per
cent target.

With Fed
fund futures currently pointing to a 96 per cent chance that the central bank
lifts rates in two weeks, a better-than-expected jobs report could bolster
those odds further.

1. OPPORTUNITY.
There are dozens of these every day, unfortunately you can’t buy them all, so
only pick the top 10 and then narrow them down to 2 to 3. This is done by using your buying criteria which is part of your trading
plan which you already have written down. (Hopefully you have one?)

2.BUYING and SELLING. I have a pre planned strategy
which I have developed by trial and error; this was achieved by learning by my
trading mistakes and the mistakes of others. 3.PATIENCE.This is definitely a virtue worth
developing. Sometimes the market is going up in the right direction, but is not
going as fast upwards as you would like. Be patient and
use a “stop loss” to lock in those profits. However small they may
be. Also don’t always be in a hurry to “buy that next share” just
because you have that money burning a hole in your pocket. Do your
homework and then you have chosen the right share for the right reasons and not
just because it looked good

4.STRESS.If it is hurting! Don’t do it, cut your
losses or be content with a small profit and get out.

5.THINK and PLAN AHEAD. After I have bought a stock
and once it has been cleared. I immediately put a sell order in at the price/
percentage that I had previously worked out using my trading plan.

This trading plan is not set in concrete as it is revised usually on
a monthly basis. And always be prepared to improve on it where necessary.

Depending on the volume and the stock’s volatility I occasionally
vary my profit margin upwards. If I do this, I always keep a watchful eye on
its movement and put in a stop loss to lock in those precious
profits.

6.HOPE.This
has no place in a trader’s plan, as Hope leads to procrastination (putting
thing off).And this will lead to losses which you can ill afford.

7.WORRYING. The same thing applies as above; if you
are worrying about a stock then it is time to sell it.

8.FUN. You should enjoy trading for if isn’t fun
then it’s time to put your money into managed funds and quit trading.

9.RESPONSIBILITY. Take responsibility for your
trading mistakes and learn from them. No one else made you buy that stock.

10.CONFIDENCE.Have faith in your abilities. At all
times be a “Student” for you never know it all. And the minute you become
complacent, something nasty comes along to bring you back to earth
with a thump. I hope these tips will give you some assistance in finding you
profitable shares and improves your trading skills.